Westminster Council has insisted it did not break any rulesWestminster Council's parking department is being investigated by the European Union over alleged contractual irregularities, BBC London has learned.

The inquiry concerns Partnerships in Parking, a body set up by the council to allow local authorities to join forces to buy cheap parking services.

In February, BBC London revealed police are holding an inquiry into another contract awarded by the department.

Westminster Council has insisted it did not break any rules.

Partnerships in Parking (PiP) was set up by Westminster's head of parking Alastair Gilchrist and Councillor Danny Chalkley.

Transport for London and six local authorities in the city joined when it was first started up. They said they hoped to get a better deal for parking enforcement services from the private sector.

We are aware of this enquiry and have responded to the commission's request for informationCouncillor Danny Chalkey

Canadian company Verrus was awarded the contract to provide pay-and-display services, pay-by-phone, parking tickets and debt collection to the councils.

But it is alleged that, when additional councils joined PiP, they broke European Union rules by automatically starting to use Verrus, rather than tendering it out.

The British government chose not to investigate the case. But the European Union launched its own enquiry - and ordered the UK government to account for its own decision not to.The Office of Government Commerce (OGC) then asked Westminster Council's legal team to draft a reply to the EU.

Infringement proceedingsAn OGC spokesman told the BBC: "I can confirm that we have been in discussions with the European Commission and Westminster Council and we will be able to update you in due course."

A European Commission spokesman said: "There is indeed a case. We sent a letter of formal notice on 20 November 2009 - this is the first stage of our infringement proceedings."UK authorities replied on 22 January. This reply is currently under assessment - next step not yet decided."If we're content with [the] UK government reply, we close the case. If we're not, then we move to the second stage of infringement proceedings."

Councillor Danny Chalkley, Westminster Council's cabinet member for city management, said: "We are aware of this enquiry and have responded to the commission's request for information."The contract was properly awarded after a tender process carried out in accordance with the law and the council's procurement processes."We will continue to work with Verrus to provide effective parking services across central London."

'Too busy'On Wednesday Mr Gilchrist was due to speak at a conference on parking services to "discuss the merits of the PiP framework agreement" (The agreement to have parking services supplied by Verrus through PiP).However, he cancelled the event at the last minute. Mr Gilchrist told the BBC it was because he was "too busy" to speak.It is the second time in as many months it has emerged that the council's parking department is under investigation.In February, police began an investigation into allegations of fraud against two senior officers at Westminster Council.

That case concerned the awarding of another multi-million pound parking enforcement contract to a different private company.Westminster insists that contract was also properly tendered.

That investigation followed a series of controversies connected to Westminster Council's parking department.

Earlier in February, BBC London revealed that Westminster's diplomatic parking bays had not had the correct authorisation for three decades, meaning millions of pounds of fines may be unenforceable.

In January it was caught ordering officers to find ways to use parking to make more revenue, in an apparent breach of the law.